Digital News is the latest buzzword in the news business. But what does it really mean for the future of news? At an event on November 1, 2011 at the CUNY Graduate School of Journalism, Professor Jeff Jarvis talked with John Paton, (CEO of Journal Register, MediaNews, and Digital First Media) and Justin Smith (president of Atlantic Media), two executives who are building Digital First futures for their print companies. The discussion drills down to the specifics of how they are executing their strategies: covering content, revenue, costs, staffing, and the challenges that come with disruption.

One of the goals of the New Business Models for News Project is to help local sites grow into sustainable operations. Toward that end, we’ve created a Resource Guide for Local and Niche Sites, which aggregates some of the best sources of information about a variety of editorial,business,technology, and legal topics relevant to running a small website. The guide will be updated over time.

The resource guide was compiled by Jordan Shakeshaft and Alex Abad-Santos. Funded under grants from the Carnegie Corporation of New York and The Tow-Knight Center for Entrepreneurial Journalism.

Describe your product/service.Ad Avengers helps advertisers and publishers connect directly. We also provide a listing and briefing process for the creative element of display advertising. Our experience has been that ad networks and ad exchanges overlook smaller publishers who have vibrant communities, so we help publishers monetize these communities and advertisers connect with these communities.

How can Ad Avengers help local publishers?
Local publishers have a problem because their audience numbers aren’t necessarily the right size for traditional ad networks and ad exchanges. On the opposite side of the equation, local advertisers have a problem finding publishers through large ad networks. We’re a marketplace that can connect advertisers and publishers on a local level.

How do you simplify the process of advertising online for local businesses?
We stay away from promising super-targeting and we don’t use traditional digital pricing (CPMs and CPCs). We focus instead on finding sponsorship opportunities for publishers and then provide retrospective CPCs to advertisers, but the real value is building a brand and supporting the (relatively) little guy.

Who is currently using your product?
We’re launching a trial with a couple of smaller publishers using the Moonfruit platform and other blogging/publishing tools. We’re UK-based but are also looking for US publishers and advertisers who would like to be part of our trial.

How can local publishers increase revenue on their sites?
Focus on your content and community and let a product like Ad Avengers help you monetize. The more content you build, the more interest you’ll get from users and from advertisers.

Who are your primary competitors? What value do you provide that makes Ad Avengers a better solution?
Our primary competitors are ad networks and ad exchanges. Google AdWords and other products can be a big beast to compete with. Our advantage is that we provide a service that helps the smaller publisher, which is a segment that often gets overlooked by the big players. We’re better because we’re leaner and are offering a service that will fit different publishers of different sizes rather than needing publishers to fit us.

What is your revenue model?
We take a commission on a successful sponsorship placement. The rate depends on how big and how valuable is the audience we’re supporting. With some publishers the revenue split is 80% to the publishers, 20% to us. In other cases, we’re taking a 5% commission.

How does a local site implement your products?
There’s two parts to implementation: helping us develop a publisher profile and inserting the ad code into your site to display the ads. We’re trying to make it as simple as possible and no more difficult then implementing a Google AdWords campaign.

What is your outlook for the local advertising marketplace over the next 2-5 years?
Local advertisers are moving more of their budgets away from traditional media and into online. Ad Avengers is hoping to help make this easier and more efficient for local advertisers.

What do you see as the biggest hurdle for local advertisers? How does Ad Avengers address this issue?
Finding the right publisher is definitely the biggest hurdle. Even if you are an expert at search and can find the right publisher, it’s difficult to contact the right person, discuss rates and content terms, and manage the process. Ad Avengers addresses this by making it transparent, showing an advertiser the rate, the audience, and excerpts of content to help answer the difficult questions right off the bat.

Describe your product/service.Adility is a hyperlocal distribution hub that connects online publishers and local advertisers in a way that enables local advertisers to promote local advertising content (coupons, daily deals and prepaid cards) to a publisher’s customers. Publishers benefit by providing their users with unique local commerce content thereby increasing retention, engagement, and revenue; and local advertisers benefit by driving new customers into their stores at a lower cost than traditional cpm based advertising. We provide everything a publisher needs to add a daily deal offering to their portfolio of products either through our white label daily deal site or our API.

How can Adility help local publishers?
Adility helps local publishers monetize their installed customer base through the offer of local deals from local merchants

How do you simplify the process of advertising online for local businesses?
We take the guesswork out of local advertising. A local merchant doesn’t pay until he/she gets a customer who has purchased a product. So the local merchant knows there is a direct relationship between the money spent and a customer acquired.

Who is currently using your product?
We provide deal aggregation services to more than 6,000 small businesses nationwide, and we distribute them across our network of publishers who in the aggregate generate more than 100MM Unique Visitors per month. We currently provide products and services to a variety of traditional and mobile publishers such as: Coupons.com, CBS Interactive, Interactive One, DailyDealster, Wegeo, and many others.

How can local publishers increase revenue on their sites?
Know your users. If you know your users well, you will know the types of deals that will appeal to them. Matching the right deals to the right customer certainly impacts conversion

Who are your primary competitors? What value do you provide that makes Adility a better solution?
We currently compete with the likes of NimbleCommerce, Group Commerce, and Tippr. Our biggest competitive advantage is that not only can we provide publishers with a custom white label site, but we can provide that publisher with unique local deals in the city of their choice. So, we can help that publisher drive revenue immediately on launching a daily deal product on their site. Our competitors offer a software solution but no deals.

What is your revenue model?
We derive our revenue from sharing revenues with the publisher. We generally split net revenue with our publishers 50/50.

How does a local site implement your products?
Creating a turnkey white label solution is very easy and generally takes around 2 weeks. Using our API is even easier and we can get a publisher up and running using our API platform in several days.

What is your outlook for the local advertising marketplace over the next 2-5 years?
CPC based advertising will take significant market share from CPM based brand advertising where small businesses and local merchants are concerned. The simplicity and accountability of CPC based advertising makes it an ideal product for small businesses and local merchants that don’t have large advertising budgets.

Do you have any new products in your pipeline that will serve the needs of local publishers?
Our white label and API products are designed to help local publishers monetize their customers.

What do you see as the biggest hurdle for local advertisers? How does Adility address this issue?
The biggest problem for local advertisers is the ability to aggregate large audiences for their messages at a reasonable cost. Until Groupon came along, local advertisers had very limited options in using the power of the Internet to aggregate large audiences. Groupon and sites like Groupon have shown that there are sustainable business models that allow local merchants to aggregate scalable audiences at low cost.

What sites do you think are effectively targeting and reaching the local market?
I think that Groupon has done a great job in illuminating a business model that helps small businesses advertise their products. I think the market will evolve over time and there are ways in which they can improve but as the market leader, they’ve done a good job.

Describe your product/service.InstiAds is an easy-to-use, self-serve ad buying and management toolset that can be used on any platform. It was designed especially for small and local businesses.

How can Instiads help local publishers?
The cost of advertising sales is extremely prohibitive to local publishers, which are often small, extremely focused operations. Instiads makes it possible for a one or two-person team to generate sales, manage advertiser campaigns, and handle billing while continuing to run the day-to-day content and news-gathering operations. Self-serve isn’t magic – there are still *plenty* of opportunities to talk directly with your advertisers – but it reduces the cost of sales to a sustainable level. We also have engineered our service to be extremely network friendly. In fact, you could use Instiads to build an advertising network in a very short time.

How do you simplify the process of advertising online for local businesses?
The simplest way for a local business to buy an ad would be for them to call up the local publisher, talk through a rate card, and hand over a credit card number. We’re not that simple! But we do turn the transaction of buying an ad into a step-by-step process that leads a local business advertiser from a menu of available inventory right through the creation of an ad using an image provided by the advertiser. Our goal was to make it no more complicated to buy an ad on a local blog than it *used to be* to buy an ad via Google AdWords. Google has since made many changes that cater more to big agencies than small and local businesses. This has over-complicated the transaction process.

Who is currently using your product?
Our biggest success has been the deployment of Instiads to create the Seattle Indie Ad Network. More than twenty Seattle area news sites and local blogs, using a variety of publishing platforms, have created a combined inventory pool that allows Seattle advertisers to reach a substantial local audience. Some of the sites include: Pubicola, My Green Lake, Wallyhood, and Seattle Transit Blog.

How can local publishers increase revenue on their sites?
First: Optimize your own inventory and use an ad-serving technology capable of advanced serving, even if you sell only flat-rate placements. Join and create networks.

Second: Join and create networks. Creating a secondary flow of revenue – especially one that is traffic sensitive, i.e., you make more when you have more visitors – is one of the few opportunities we’ve seen work beyond the first tier of simply selling your own site inventory.

Who are your primary competitors? What value do you provide that makes
Instiads a better solution?
OpenX and Google Ad Manager are widely used. Of the two, we’re most similar to Ad Manager, although that system does none of the self-serve on the buy side (yet!) that we do. We’re a much simpler “installation” than OpenX – our system isn’t about massive amounts of flexibility and integration with back-end coding, etc. We’re a service – if you want Instiads on your site, you create an account, set up a couple inventory positions, and add the javascript widgets to your site template where you want the ad to appear.

What is your revenue model?
We share revenue on any credit card transactions in the system – our share is 20 percent. Revenue shares are a funny thing when you’re talking local publishing. I talk to a lot of people worried about 20 percent of zero. I understand it. From what I’ve seen, though, you have to have a solution more advanced than sticking a bunch of graphics in a page and then trying to collect checks. You don’t have to use Instiads, but we think the value is a fair trade and, frankly, we’ve pounded it down as low as possible to the point where the share is mostly about covering credit card transaction costs and technology fees for serving.

How does a local site implement your products?
Sign up here, create some ad positions, cut and paste the javascript widgets in your site template, profit.

What is your outlook for the local advertising marketplace over the next 2-5 years?
There remains a massive underserved market of businesses that “don’t advertise” – we think one of the biggest reasons they don’t is because there really haven’t been a lot of sites that have good ROI for the locals. As new sites and services are created to give local advertisers a good audience to reach, we think that will drive growth. Not just display advertising, but every type of marketing – even search.

We’re also seeing a mashing together of social media and display advertising that attracts local advertisers. The social media appeal is obvious – it’s relatively affordable. The display component comes in both to augment their decision to commit to a social media effort and, interestingly, to better surface things like Facebook and Twitter accounts. We assume there will be more and more self-serve paid promotion type opportunities in the social media space. We think this will help create more advertisers out of the “don’t advertise” mass.

Finally, self-serve is bigger than most people think. There is always going to be a barrier to a local business owner spending the time and effort to learn how to use online advertising tools. But as more and more systems become accessible, we’re seeing smaller and smaller “agencies” – probably better to start calling them agents. These agents will have the same needs as big agencies and the tools will eventually scale down to serve them. In the meantime, there will be lots of manual, sloppy display purchasing. Eventually, targeting and the like will scale down to the local agent/social media expert level. But self-serve abilities will be at the core of this scaling down. It’s really important and I’d be skeptical of any large players who don’t move quickly to make self-serve the model for how their ad buying and management operates.

We also see the growth of group buying services.

What do you see as the biggest hurdle for local advertisers? How does Instiads address this issue?
The biggest hurdle for a small business is knowing how much to spend on advertising. Since Instiads offloads the technical and business processes from the publisher, we can help them attract more local ad dollars by allowing them to keep their ad rates lower.

What sites do you think are effectively targeting and reaching the local market?
There are 2,002: a couple thousand independent news sites that I’ve never even heard of. Plus Twitter and Facebook.

Describe your product/service.isocket helps websites sell their own ads directly to advertisers. The seller/website can package their ads they way they want to, with their own rules and pricing. We offer a clean interface for buyers to easily purchase ad campaigns and for sites and bloggers to manage those campaigns. We take care of all the painful parts: invoices, payments, ad serving, statistics, scheduling, etc.

How can isocket help local publishers?
Local media shouldn’t have to think small just because they are small. Ad networks alone often don’t cut it. Even though local advertisers are buying less radio and newspaper ads, they still want to reach local people. Local websites and blogs are the way to do it – so we give them the tools to go from stuck-with-AdSense to a hyperlocal ad-selling machine.

How do you simplify the process of advertising online for local businesses?
The key to local ad sales is simplicity. People don’t want to jump through hoops to buy a $100 monthly sponsorship, or to learn how complicated ad-targeting exchanges work. We make the process as painless as possible.

How can local publishers increase revenue on their sites?
• Think of selling your own ads like you’re opening up a local retail store. You have a store where you want to sell products to customers. That means promotion, relationships, money, etc.
• If you’re new to direct sales, it can take a while to ramp up. Again, your store doesn’t turn a profit on opening day.
• Don’t overprice your inventory. Focus on pipeline, then raise the prices to an equilibrium.
• Promote!!! How will anyone buy from your store if they don’t know you’re open for business?

Who are your primary competitors? What value do you provide that makes Isocket a better solution?
In terms of similar tools for hyperlocal, the biggest competitor is actually “paper and pencil.” Many publishers use a combo of email, a spreadsheet, PayPal, and maybe an ad server. The status quo needs to change!

What is your revenue model?
The revenue share is a whopping 0%! isocket was the first commission-free ad platform. Publishers pay a flat monthly fee based on how large they are. For example, you can serve 1 million ad impressions per month for $49.

How does a local site implement your products?
We strive to make it as simple as possible, but it’s by nature not something that’s ready to go in 5 minutes. For example, you need to configure your ad packages and set the pricing. It can take 30 to 60 minutes to get out the door, but we’re always here to help.

What is your outlook for the local advertising marketplace over the next 2-5 years?
Maturing, hopefully. Advertisers want to reach these audiences in a meaningful way – it’s just too hard and inefficient to do so right now. The local ad industry will flourish when the transactional friction drops and the quality of inventory rises.

What do you see as the biggest hurdle for local advertisers? How does Isocket address this issue?
Local advertisers need an easy way to buy. They are used to the behavior of calling up their local radio station and saying “Hey Joe, put me down for another $5,000 this week.” They need it to be that simple for buying an ad online.

What sites do you think are effectively targeting and reaching the local market?Brooklyn Heights Blog has run a prodigious number of ad orders through our system. The site has a combination of a well-known blog and an easy-to-manage interface (via isocket). They also put an incredible amount energy toward contacting advertisers to buy on the site.

Describe your product/service.Flyerboard is a virtual bulletin board for local publishers to show interactive local ads made from flyers, posters, or other print ads.

How can PaperG help local publishers?
The Flyerboard can enable publishers and their sales reps to easily display local ads made from existing print creatives. The simple interface makes ad serving, management, and selling extraordinarily easy.

How do you simplify the process of advertising online for local businesses?
Flyerboard requires minimal materials that you likely already have on hand — such as a flyer. It makes ad space available on a fixed price basis so local advertisers and sales reps understand the pricing and value easily. It also reduces the complexity of online ad serving.

How can local publishers increase revenue on their sites?
They need to be proactive and go out and sell. Being aggressive in sales is critical.

Who are your primary competitors? What value do you provide that makes PaperG a better solution?
Legacy print-to-web systems providers like Travidia are the primary competitors to Flyerboard. Our system is designed to support premium ad units and not simply take print materials and bring them online. It’s built around delivering real value to the publisher and advertisers by powering premium ad units.

What is your revenue model?
We do a revenue share depending on volume with publishers getting 70-80% and PaperG receiving 20-30%.

How does a local site implement your products?
It’s very easy to implement once an account is set up. You just use the interface to specify what size ad unit you want, what pricing, and what type of ads – then you get code to copy and paste onto your site. It takes a couple of minutes to get started.

What is your outlook for the local advertising marketplace over the next 2-5 years?
It is going to get bigger and more competitive. Being able to reduce the complexity of local online advertising will be the key to success.

Do you have any new products in your pipeline that will serve the needs
of local publishers?PlaceLocal is an ad technology that makes display ad creation as easy as typing a business name and address into the program.

What do you see as the biggest hurdle for local advertisers? How does PaperG address this issue?
When local advertisers don’t understand the pricing or don’t have a creative ready to go, then sales come to a stop. We built our system to be simple and easy to get started with existing print creative material.

What sites do you think are effectively targeting and reaching the local market?New Haven Independent has done a great job. The site has a high penetration of local readership and its ability to attract advertisers and get them to respond is very strong.

How can local publishers increase revenue on their sites?
Analytics and account management assure the best possible chance for success in the market, along with consistency of a definitive marketing plan

What is your revenue model?
There is no upfront cost. Our revenue is dependent on the success of the product.

How does a local site implement your products?
We have adapted best practices to the site in terms of development and usage so implementation takes very little time.

What is your outlook for the local advertising marketplace over the next 2-5 years?
Flash marketing has gone mainstream and is expected to be an integral marketing tool for local advertisers into the future.

What do you see as the biggest hurdle for local advertisers? How does Shoutback address this issue?
Minimize risk and increase their social media exposure. Our platform is a wonderful tool that accomplishes both of those objectives.

How can Trafficspaces help local publishers?
Each publisher gets its own Ad Store, which is dedicated ad management site. A publisher’s Ad Store
• allows advertisers to buy ads directly from publishers instead of going through middlemen, thereby helping the publisher save costs;
• gives publishers more control over ad quality, reducing the number of irrelevant ads on their sites;
• features a simple interface that lets local advertisers to get started very quickly.

How do you simplify the process of advertising online for local businesses?
Our system makes advertising simple by:
• reducing the number of steps it takes to get started;
• providing ad templates so that local advertisers can customize great ads with their own text and logo;
• allowing advertisers to purchase on a pay-per-day/month basis in addition to CPM and CPC pricing, which is easier to understand for some advertisers

Who are your primary competitors? What value do you provide that makes Trafficspaces a better solution?
Our primary competitors include AdReady, Google Ad Manager, and OpenX. Our key value is that our system is designed primarily around the needs of the advertisers rather than technical administrators. As a result, the user experience is powerfully simple.

Publishers need to provide better geo-targeting and interest-targeting for advertisers. With Trafficspaces, publishers can do just that – help their advertisers target their ads very accurately and improve their return on investment.

What is your revenue model?
We charge a flat monthly fee that starts at $19.99.

How does a local site implement your products?
Integration is as simple as dropping a piece of JavaScript into the publisher’s site. We also have a WordPress plugin that makes it even simpler. The whole process can be completed in less than 10 minutes.

What is your outlook for the local advertising marketplace over the next 2-5 years?
I believe that more local sites will be accessed through mobile devices so it’s going to be important to make sure that local sites are optimized for mobile access and they can serve ads based on a user’s proximity to a location.

Do you have any new products in your pipeline that will serve the needs
of local publishers?
We are working on a marketplace/directory that will list Ad Stores from multiple local publishers and help to drive advertisers to their sites.

What do you see as the biggest hurdle for local advertisers? How does Trafficspaces address this issue?
The biggest hurdle is getting a positive Return on Investment on their ad campaigns. If they spend a $1000 on a local site and get no boost in sales then, needless to say, they won’t be spending any more. To solve this problem, we work with publishers to improve the quality of their ad targeting so that local ads are only shown to relevant audiences.

What sites do you think are effectively targeting and reaching the local market? PlentyOfFish, the online dating site, is killing it right now with their targeted advertising system. They have a wealth of information about their members, which they use to create both better matches and serve more targeted and relevant localized ads.

When it comes to selling ads, managing inventory, or helping local businesses create online advertising campaigns, most local sites readily admit they need all the help they can get. And while there is no secret sauce that magically increases revenue, a number of new companies have emerged to provide a variety of advertising solutions for small publishers. The following series profiles some of the latest entrants into the local online advertising space, including Ad Avengers, Adility, InstiAds, isocket, PaperG, Shoutback, and Trafficspaces.

The lineup of companies presented here is by no means comprehensive, nor is it an endorsement of their products and services. Our goal is to create a conversation around the new tools that are available to local sites. Let us know what’s working for you. Thanks to all the folks who were interviewed. We appreciate your time.